objective 3: describe legislation related to closing Flashcards
(56 cards)
A federal law that requires certain disclosures about the mortgage and settlement process and prohibits certain practices that increase the cost of settlement services, such as “kickbacks” and referral fees.
Real Estate Settlement Procedures Act (RESPA)
The Consumer Financial Protection Bureau (CFPB) issued the __ to implement provisions of the Dodd-Frank Act intended to combine and clarify financing disclosures to consumers.
TILA-RESPA Integrated Disclosure rule (TRID)
RESPA does NOT apply to loans on large properties that are more than ___.
25 acres
RESPA does not apply to loans for ___ or ___ purposes
business or agriculture
___ does not apply to construction loans or temporary financing
RESPA
RESPA does not apply to ___ unless a ___ will be placed on the lot within ___.
Vacant land unless a dwelling will be placed on the lot within 2 years.
___ does not apply to a transaction financed solely by a purchase money mortgage taken back by the seller.
RESPA
RESPA does not apply to a(n) ___ contract
installment contract (contract for deed)
RESPA does not apply to a buyer’s assumption of a seller’s ___ if the terms of the the ___ are ___.
existing loan if the terms of the loan are modified
When the lender charges more than $___ for the assumption of the seller’s existing loan, the transaction is subject to RESPA regulations.
$50
___ prohibits kickbacks and fee-splitting for referrals of settlement services and unearned fees for services not actually performed. These settlement services include activities such as mortgage loans, title searches, title insurance, attorney services, credit reports, and appraisals.
Section 8
___ prohibits home sellers from requiring that homebuyers buy title insurance from a particular company.
Section 9 (NINE)
___ prohibits lenders from requiring excessive escrow account deposits, money set aside to pay taxes, hazard insurance, and other charges related to the property
section 10 (TEN)
Although RESPA’s requirements are aimed primarily at lenders, real estate licensees fall under RESPA when they…
Refer buyers to particular lenders, title companies, attorneys, or other providers of settlement services.
Licensees who offer computerized loan origination (CLO) are subject to ___.
RESPA
Buyers have the right to ___ of settlement services.
Select their own providers
To streamline the settlement process, a real estate firm, title insurance company, mortgage broker, home inspection company, or even a moving company may agree to offer a package of services to consumers. This system is called a(n) ___.
Affiliated business arrangement (ABA)
RESPA permits an ABA as long as the consumer is informed of the ___ among service providers
Relationship
RESPA permits an ABA as long as the consumer is informed that ___ is NOT required.
Participation
RESPA permits an ABA as long as the consumer is informed that ___ are available.
other providers
RESPA permits an ABA as long as the consumer is informed the only thing of value received by one business entity from others, in addition to permitted payments for services provided, is a(n) ___ or ___
return on ownership interest or franchise relationship
In an ABA, fees must be reasonably related to the value or services provided and NOT be fees exchanged among the affiliated companies for…
Referring business to one another
CLOS that provide services to consumers may charge for the services provided, but those fees must be….
disclosed on the closing disclosure
A consumer protection ruling that gives more transparency to the loan process.
TILA-RESPA Integrated Disclosure Rule
